Larry owns a successful business called Super Car-Hire.He plans to sell it to Bob.Bob assumes that he can keep up the high revenues if he can plan and execute the mission of the business well.Which of the following basic accounting concepts is reflected in Bob's assumption?
A) The business entity idea
B) The going concern expectation
C) The accounting equation
D) The revenue and expense premise

Question

Quizplus · Accepted Answer

The going concern expectation is reflected in Bob's assumption that he can continue to generate high revenues if he plans and executes the mission of the business well. This concept assumes that the business will continue to operate indefinitely and generate enough cash inflows to meet its obligations. It is a fundamental accounting concept that affects financial reporting and decision-making.

Larry Owns a Successful Business Called Super Car-Hire